Radelow, I’m beginning to agree with your coworker. Californians (and San Diegans) are reselient, and the vast majority made soooo much equity on their homes in the last 5 years that they will and can stay on the sidelines, or fool around with “entertaining” offers (I love that – please sir, may I buy your house?). In an overall picture, yes, we’ll see 15 -30% declines, but most will say “who cares? I still made 80%+ over the last 5 years. No need to panic.” The low to mid income areas will have some major correction (as usual), but the majority will cruise and hunker down. I’ve been through the nineties down turn, bought and sold houses, and I’m renting now, and yes, this is different. Loan practices,( even though they are tightening) are still free money compared to 15 years ago. Psychologically peoples mindsets have readjusted – if my housing is 50% of my income, so be it. We’ll adjust. Gas goes up to $4 a gallon, everyone will keep driving. People find a way. Combine equity+cheap money+mental reset and that’s a tough nut to crack.
